Highlights—September 20, 2008

Vault IBM IGS forum: "Delayed
Posting of Expense Report Payments" by "GBS-BC". Full excerpt: Delayed Posting of Expense Report
Payments to Corporate Charge Card Statements. "Expense reports processed for payment between Friday, September
12, and Friday, September 26, will post to your American Express account on Wednesday, October 1, prior to the
American Express monthly payment due date. This adjustment will not impact employee delinquencies." Any clues
as to what this is all about?

Vault IBM IGS forum: "Fluffing
the financials again" by "Frank Cary". Full excerpt: The Pig's financial engineering squad has
determined that the books need to be fluffed (in the pornographic industry sense) to secure the Band Cs and above
their quarterly bonuses. Notice how expenses incurred in the Third Quarter are not being recognized until the fourth
Quarter. The Pig is seeing the effects of the strengthening dollar affecting international (I refuse to say global)
sales results negatively and customer-delayed buying decisions are dragging down the Ever Sacred quarterly results.
The IBM Company's fortunes fluctuate with the winds and tides but the bonus obscenities must always obey the song "Ever
Onward".

Vault IBM IGS forum: "Frauds" by "Frank_Reality".
Full excerpt: Frank has it right - IBM's motto used to be "THINK". It has become "CHEAT".

ZD-Net: HP vs. IBM: The looming IT services war.
By Larry Dignan. Excerpt: HP and IBM want your services business and the jockeying for position has already
begun. Later today, HP holds its analyst meeting where CEO Mark Hurd will provide a new financial outlook including
the EDS purchase, which just closed, and outline the company’s enterprise plan. In a nutshell, it’s a blueprint
to how HP is going to try and poach some IBM mojo.

ZD-Net: HP to cut nearly 25,000 jobs as part
of EDS integration. By Sam Diaz. Excerpt: Hewlett-Packard is releasing details of its plans to integrate EDS
into growth strategy, including a restructuring plan for the EDS business group that will reduce the workforce
by almost 25,000 employees - half of which are in the U.S. - over the next three years. From HP’s release:

The restructuring program will take place over three years and includes a workforce reduction that
will streamline the combined company’s services businesses. Workforce reduction plans will vary by country,
based on local legal requirements and consultation with works councils and employee representatives, as appropriate.
Approximately 7.5 percent of the combined company’s workforce, or about 24,600 employees, will be affected over
the course of the program, with nearly half of the reductions occurring in the United States. HP will provide
employees affected by this restructuring program with severance packages, counseling and job placement services.
HP expects to replace roughly half of these positions over the next three years to create a global workforce
that has the right blend of services delivery capabilities to address the diversity of its markets and customers
worldwide.

Yahoo! IBM Employee Issues message board: "Question
re. Retirement Medical Bene Eligibility" by "gary_pr".
Full excerpt: I'm 53 and have 24 years with IBM. If I leave before I'm 55 or get RD'd before I'm within the
1-year bridge range, will I still be eligible for retirement medical benefits from IBM when I reach age 55?
The formula on w3 includes "age 55 with at least 15 years" but I'm confused if that means when I
leave IBM or when I retire.

Yahoo! IBM Employee Issues message board: "Re:
Question re. Retirement Medical Bene Eligibility" by Kathi Cooper. Full excerpt: It means when you leave
IBM. You don't retire anymore. They took that word away. If you look that word up in HR's documents, it doesn't
come up, except in the appendix. Give it a try. Run a word search on 'retire'. You leave IBM, take your pickens
according to their latest rules, and that's it.

Yahoo! IBM Retiree Issues message board: "medical
and COLA's" by "thomas365us". Full excerpt: Just like to add my two cents worth, I started in
56, retired in 86. I cannot remember how many managers talked about the free medical for life, and to not pay any
attention to the disclaimers in the books as that would never happen. I know it was not in writing, we did not
know then everything had to be in writing. As for COLA's, they were never promised, just implied. I can remember
speakers from high places in IBM making fun of the shoe company in Endicott because their retires had never had
a COLA, implying IBM would never treat their retirees that way. Again as you say it was not in writing. So much
for the history lesson, now we just have to do the best that we can, and move on.

Yahoo! IBM Retiree Issues message board: "Re:
medical and COLA's" by "ibmshaftee". Full excerpt: A couple more pennies---As a first line manager
in the 80's I was told in multiple management classes that when discussing salary increases with employees they
should me made to understand that salary was more than an hourly wage. All benefits must be considered including
vacation, S&A, current medical benefits, medical in retirement, the retirement plan as well as those other
items such as Long Term Disability, Accident Insurance, Group Life Insurance etc etc etc This supposedly place
IBM very high in the rankings of what it paid its employees. That sounds like implied promises to me.

In addition the branch manager I worked for at the time was asked a question about COLAs during one of those
80's buy outs. He did not have an answer so he sent an PROFs message to human resources. The answer also implied
COLA's existed but were not called COLA's..The response said that though it is not a part of the normal retirement
plan IBM had given these increases in the past and there was no reason to believe that this would change. I started
in 66 and retired in 96.

24/7 Wallstreet: A Dozen Companies Which Should
Lay-Off 10,000 People This Year. Excerpt: Why would IBM (IBM), one of the world's most successful technology
companies, ever cut staff? To save money. There were rumors over a year ago that the firm would lay-off 150,000
people and bring them back as consultants or move the jobs to Asia. That did not happen, but there was some real
sense behind the discussion. Last year, IBM's employee count in India rose from 52,000 to 73,000. Big Blue has
about 350,000 workers worldwide. While IBM's total revenue is growing at 13% based on last quarter's numbers, it
does have some segments which are not doing nearly as well. Revenue in the company's systems and technology group
was up only 2% for the period. Financing operations are also lagging IBM's total growth. Management at the firm
has made its mark by driving efficiency and controlling costs. IBM may not cut 10,000 worldwide, but it is a good
bet that a lot of jobs will be sliced in the US. Most of that work is going to India.

Wall Street Journal: New
Employee Benefit: Financial Adviser. By Sarah E. Needleman. Excerpt: Recently, on the advice of her financial
planner, Jeri Allan rebalanced her 401(k) portfolio, slashing in half her big allocation in large-company equities,
which was heavy in IBM stock. Who paid for this advice? Her employer, IBM. Ms. Allan, a global sales director and
24-year veteran of International Business Machines Corp., has been receiving monthly 90-minute sessions with a
financial expert, as part of IBM's Money Smart program launched last year. The program aims to help employees with
planning for retirement, managing their investment portfolios and other money matters.

Tech Republic: Why
outsourcing is scaring off potential CS students. There’s no doubt that students are still
saying “no” to Computer Science (CS). CS enrollment has declined 60% in general and 80% for women in recent years.
What’s at the root of this trend, and what can be done about it? By Steve Holzner. Excerpts: Computer Science (CS)
was whooping it up big-time during the dot-com mania — everyone and their brother/sister wanted to be a programmer.
CS enrollment soared because students clearly saw the field as the road to riches. You couldn’t turn around without
hearing about yet another 18-year-old millionaire. Everyone older than 18 became jealous enough to open The C
Programming Language by Kernighan and Ritchie — at least until they started to read it. The dot-com bust put
the kibosh on the CS mania. After soaring to the heights, CS was in the depths. But that’s not enough of an explanation
for the persistent out-ness of CS these days. ...

You’ll find the real answer if you spend some serious time with corporate programmers, which I do. It turns
out that there’s widespread despondency out there among many pros working for Fortune 500 companies. The bugaboo
can be summed up in one word: outsourcing. If I had a nickel for every corporate programmer who told me that
they wish they had gone into any field other than programming, I’d have — well, a lot of nickels. The general
feeling seems to be: “How can I stake a career on a job that may be gone tomorrow?” And that’s what’s affecting
potential CS students as well.

I used to teach classes of 400 to 500 students in the hard sciences at Cornell, and I would sometimes ask
them if they ever considered other disciplines. The most common objection to CS was just that outsourcing =
death.

Social Security Administration: Fast
Facts & Figures About Social Security, 2008. Preface: Fast Facts & Figures answers the most frequently
asked questions about the programs SSA administers. It highlights basic program data for the Social Security (retirement,
survivors, and disability) and Supplemental Security Income programs. Most of the data come from the Annual Statistical
Supplement to the Social Security Bulletin, which contains 250 detailed tables. The information on the income of
the aged is from the data series Income of the Population 55 or Older. Data on trust fund operations are from the
2008 Trustees Report.

The tables and charts illustrate the range of program beneficiaries, from the country's oldest to its youngest
citizens. In all, about 55 million people receive some type of benefit or assistance. Judi Papas prepared this
chartbook. Staff of the Division of Information Resources edited the chartbook and prepared the print and Web
versions for publication.

Plan Sponsor: Single Women Far Behind the Retirement
Savings Curve. Excerpts: Many single women are ill-prepared
and unlikely to achieve a financially secure retirement if they don’t take action now, according to the Ninth
Annual Transamerica Retirement Survey. According to the survey, single women estimate needing a median amount
of $500,000 by the time they reach retirement - an amount nearly two-thirds of respondents admitted was simply
a guess. More than one-third report that they have saved less than $25,000 for retirement, while only one in
10 reports having saved more than $100,000, according to a Transamerica announcement. Only 6% completed a worksheet
or calculation, or received their estimate from a financial adviser.

Social Science Research Network: The Health
Care Crisis in the United States: The Issues and Proposed Solutions by the 2008 Presidential Candidates. By
Marcos Pompeu Pareto, Boston University. Abstract: The United States has state of the art technology and
world renowned expertise in medical treatment, yet in terms of healthcare it shows a dramatically poor performance
in relation to the other industrialized countries. This situation is surprising, since one would expect that a
free market system run almost entirely by the private sector should show a much better performance.

This issue has reached the point of being one of the most important national concerns and the subject
of serious political and economic arguments - not only regarding how the system should be improved, but
also whether it should remain being run by the private sector under a free market approach or whether it
should be run by the government and made accessible to the entire population. The first option is supported
by the arguments that public initiatives often perform poorly and that free-market competition should prevail.
Contrarily, the other side claims that the system is only nominally a free market, that empirical evidence
shows it's not working as it should, and that other successful healthcare systems are mostly government
operated.

As is stands, the health care issue acquired national importance and is presented as a major component
of both presidential candidates programs, yet each favoring a different approach to improve accessibility
and lower healthcare costs. Republican Senator McCain relies on improving the system by maintaining its
current private enterprise, free market characteristics, while Democratic Senator Barrack Obama favours
providing universal coverage and lower costs through a higher government intervention in the system. This
paper examines the approaches proposed by both candidates and analyses the potential impact their plans
may have on the health care system. While the lack of more detailed implementation details makes difficult
accessing the effective result of each policy, the comparative review of the alternative approaches presented
in this paper will help the reader to to judge for him or herself which could be the more appropriate to
upgrade the system and attain a higher performance level.

Health Affairs: Blending
Better Ingredients For Health Reform. By Mark V. Pauly. Abstract: This paper argues that a desirable health
reform plan should accept some features that the Obama and McCain plans have in common, and combine other features
from each of the plans. Useful combinations include the presence of both public and private options and a system
of credits that are more generous for lower-income households (Obama) and creation of a system of public subsidies
that is incentive-neutral across individual and group insurance, curtailment of the current tax subsidy to
high levels of coverage for high-income households, and the use of targeted high-risk pools and guaranteed
renewability rather than community rating (McCain).

Health Affairs: Cost And Coverage
Implications Of The McCain Plan To Restructure Health Insurance. By Thomas
Buchmueller, Sherry A. Glied, Anne Royalty, and Katherine Swartz. Abstract: Senator John McCain's (R-AZ) health
plan would eliminate the current tax exclusion of employer payments for health coverage, replace the exclusion
with a refundable tax credit for those who purchase coverage, and encourage Americans to move to a national
market for nongroup insurance. Middle-range estimates suggest that initially this change will have little
impact on the number of uninsured people, although within five years this number will likely grow as the value
of the tax credit falls relative to rising health care costs. Moving toward a relatively unregulated nongroup
market will tend to raise costs, reduce the generosity of benefits, and leave people with fewer consumer protections.

New York TImes Op-Ed: McCain’s
Radical Agenda. By Bob Herbert. Excerpts: Talk about a shock to the system. Has anyone bothered to notice
the radical changes that John McCain and Sarah Palin are planning for the nation’s health insurance system?
These are changes that will set in motion nothing less than the dismantling of the employer-based coverage
that protects most American families. ...

According to the study: “The McCain plan will force millions of Americans into the weakest segment of the
private insurance system — the nongroup market — where cost-sharing is high, covered services are limited
and people will lose access to benefits they have now.” The net effect of the plan, the study said, “almost
certainly will be to increase family costs for medical care.” ...

The whole idea of the McCain plan is to get families out of employer-paid health coverage and into the
health insurance marketplace, where naked competition is supposed to take care of all ills. (We’re seeing
in the Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers and Merrill Lynch fiascos just how well the
unfettered marketplace has been working.)

Taxing employer-paid health benefits is the first step in this transition, the equivalent of injecting
poison into the system. It’s the beginning of the end. When younger, healthier workers start seeing additional
taxes taken out of their paychecks, some (perhaps many) will opt out of the employer-based plans — either
to buy cheaper insurance on their own or to go without coverage.

That will leave employers with a pool of older, less healthy workers to cover. That coverage will necessarily
be more expensive, which will encourage more and more employers to give up on the idea of providing coverage
at all. ...

This entire McCain health insurance transformation is right out of the right-wing Republicans’ ideological
playbook: fewer regulations; let the market decide; and send unsophisticated consumers into the crucible
alone. You would think that with some of the most venerable houses on Wall Street crumbling like sand castles
right before our eyes, we’d be a little wary about spreading this toxic formula even further into the health
care system. But we’re not even paying much attention.

San Francisco Chronicle: Health
care reform must start with a plan to simplify. By William R. Brody. Excerpts: In case you missed it, Great
Britain, in response to prolonged complaints from tourists, has decided to move its traffic from the left side
of the road to the right, the same way we drive in the United States. But not all traffic. After taxi and truck
drivers protested the cost of moving their steering wheels, a compromise was worked out. Cars will drive on the
right and commercial vehicles on the left.

They call this the American Medicine Plan.

None of that is true, of course. I offer this nightmarish fantasy to make the point that the United States
has the world's only health care system where everyone plays by his or her own rulebook.

In fact, there is no American health care system. You can talk about the British Medical Service or the
German medical system or the Canadian national health plan. But when you describe American health care,
there is no one system you can talk about. Medicare is different from Medicaid is different from private
insurance is different from no insurance. ...

What troubles me, however, is that whenever Washington tries to overhaul something that involves a large
universe of interest groups, it usually makes things not simpler, but more complex. And complexity is already
one of the very worst aspects of American health care.

Has anyone been to a hospital for a procedure and not been confounded by the billing process that followed?
No wonder hospitals are repeatedly asked, "Do you go out of your way to hire complete idiots for your
billing office?"

In fact, just the opposite is true. Hospitals try their best to hire good people and spend a lot of time
training them. But the outcomes are usually abysmal because every insurance plan has different rules, different
eligibilities and different coding systems.

Not so very long ago, hospitals dealt with only a small number of organizations that paid for medical
care. There was Medicare and Medicaid, Blue Cross/Blue Shield and a handful of private insurers. Recently,
I asked my chief financial officer how many payers we deal with today. The number shocked even me. He said
Johns Hopkins Hospital has to bill more than 700 different payers and insurers.

News and Opinion Concerning the U.S. Financial Crisis

Pension Rights Center: How
does the Wall Street meltdown affect my pension? By Joellen Leavelle. Excerpt: In the past few days, large
companies on Wall Street have been closing left and right, making the people who work at these companies jittery
about many issues, including their retirement security. The good news for these employees is that the money
in their pension and 401(k) plans is protected from creditors, so that even when a company goes into bankruptcy,
they don’t have to worry about their retirement money being used to pay back debts instead.

Common Dreams: Wall Street Socialists. By Amy
Goodman. Excerpts: The financial crisis gripping the U.S. has the largest banks and insurance companies begging
for massive government bailouts. The banking, investment, finance and insurance industries, long the foes
of taxation, now need money from working-class taxpayers to stay alive. Taxpayers should be in the driver's
seat now. Instead, decisions that will cost people for decades are being made behind closed doors, by the
wealthy, by the regulators and by those they have failed to regulate. ...

Nomi Prins used to run the European analytics group at Bear Stearns and also worked at Lehman Brothers. "AIG
was acting not simply as an insurance company," she told me. "It was acting as a speculative
investment bank/hedge fund, as was Bear Stearns, as was Lehman Brothers, as is what will become Bank of
America/Merrill Lynch. So you have a situation where it's [the U.S. government] ... taking on the risk
of items it cannot even begin to understand."

She went on: "It's about taking on too much leverage and borrowing to take on the risk and borrowing
again and borrowing again, 25 to 30 times the amount of capital. ... They had to basically back the borrowing
that they were doing. ... There was no transparency to the Fed, to the SEC, to the Treasury, to anyone
who would have even bothered to look as to how much of a catastrophe was being created, so that when anything
fell, whether it was the subprime mortgage or whether it was a credit complex security, it was all below
a pile of immense interlocked, incestuous borrowing, and that's what is bringing down the entire banking
system." ...

The meltdown is a bipartisan affair. Presidential contenders John McCain and Barack Obama each have received
millions of dollars from these very companies that are collapsing and are receiving the corporate welfare.
President Clinton and his treasury secretary, Robert Rubin (now an Obama economic adviser), presided over
the repeal in 1999 of the Glass-Steagall Act, passed after the 1929 start of the Great Depression to curb
speculation that caused that calamity. The repeal was pushed through by former Republican Sen. Phil Gramm,
one of McCain's former top advisers. Politicians are too dependent on Wall Street to do anything. The people
who vote for them, and whose taxes are being handed over to these failed financiers, need to show their
outrage and demand that their leaders truly put "country first" and bring about "change."

New York Times editorial: Bailout
Hide and Seek. Excerpts: On Friday, less than a week after the government took control of Fannie Mae and Freddie
Mac, the White House announced that there is no reason at this time to account for the companies in the federal
budget. That is great news for officials who prefer to hide the cost of the bailout since it is due, in large
part, to their failure to adequately regulate the financial markets and steward the economy. But it is an insult
to taxpayers, whose money is at risk, and it is a reckless gambit.

The Congressional Budget Office reported on Tuesday that the government’s finances are deteriorating rapidly:
the budget deficit for this year is expected to reach $407 billion, more than double last year’s shortfall,
and to exceed $500 billion in 2009. The takeover of Fannie and Freddie, necessary though it is, will add
to the deterioration. Airbrushing that away will only open the door to uninformed — or negligent — decisions
on spending and tax cuts.

Mother Jones: Foreclosure
Phil.
Years before Phil Gramm was a McCain campaign adviser and a lobbyist for a Swiss bank at the center of the
housing credit crisis, he pulled a sly maneuver in the Senate that helped create today's subprime meltdown.
By David Corn.
Excerpts: Who's to blame for the biggest financial catastrophe of our time? There are plenty of culprits,
but one candidate for lead perp is former Sen. Phil Gramm. Eight years ago, as part of a decades-long anti-regulatory
crusade, Gramm pulled a sly legislative maneuver that greased the way to the multibillion-dollar subprime
meltdown. Yet has Gramm been banished from the corridors of power? Reviled as the villain who bankrupted
Middle America? Hardly. Now a well-paid executive at a Swiss bank, Gramm cochairs Sen. John McCain's presidential
campaign and advises the Republican candidate on economic matters. He's been mentioned as a possible Treasury
secretary should McCain win. That's right: A guy who helped screw up the global financial system could end
up in charge of US economic policy. Talk about a market failure.
...

In essence, Wall Street's biggest players (which, thanks to Gramm's earlier banking deregulation efforts,
now incorporated everything from your checking account to your pension fund) ran a secret casino. "Tens
of trillions of dollars of transactions were done in the dark," says University of San Diego law professor
Frank Partnoy, an expert on financial markets and derivatives. "No one had a picture of where the
risks were flowing." Betting on the risk of any given transaction became more important—and more lucrative—than
the transactions themselves, Partnoy notes: "So there was more betting on the riskiest subprime mortgages
than there were actual mortgages." Banks and hedge funds, notes Michael Greenberger, who directed
the CFTC's division of trading and markets in the late 1990s, "were betting the subprimes would pay
off and they would not need the capital to support their bets."

National Public Radio: No Golden Parachutes
For Fannie, Freddie CEOs. The Federal Housing Finance Agency announced Sunday that the former CEOs of Fannie
Mae and Freddie Mac will not walk away with golden parachutes. The agency that regulates — and now manages — the
two mortgage giants said it will not allow the former executives to walk away with multimillion-dollar severance
packages. It didn't say what ex-CEOs Daniel Mudd and Richard Syron will take home, if they receive anything at
all.

New York Times Op-Ed: A Failure
Tax. By Jonathan G S Koppell. Excerpts: As venerable American financial institutions topple like dominoes,
the concept of “too big to fail” is being sorely tested. Bear Stearns gets help. Lehman Brothers does not.
The Federal Reserve and the Treasury Department are acting like insurance claims adjusters, selectively providing
assistance when a company’s failure seems too much for the financial markets to withstand.

Why not make investment banks and other companies pay premiums for this catastrophic risk insurance? The
government already provides flood, bank and crop insurance. Unlike participants in those programs, however,
the companies that qualify for “too big to fail” insurance do not pay for the privilege.

New York Times Opinion: Mr.
McCain and the Economy. Excerpts: Let’s get a few things straight. First, no one who is currently running
for president does not “believe in American workers.” More to the point, the economy is stressed to the breaking
point by fundamental problems — in housing, finance, credit, employment, health care and the federal budget —
that have been at best neglected, at worst exacerbated during the Bush years. And as a result, American workers
have taken a beating.

In clarifying his comments, Mr. McCain lavished praise on workers, but ignored their problems. That is
the real insult.

For decades, typical Americans have not been rewarded for their increasing productivity with comparably
higher pay or better benefits. The disconnect between work and reward has been especially acute during
the Bush years, as workers’ incomes fell while corporate profits, which flow to investors and company executives,
ballooned. For workers, that is a fundamental flaw in today’s economy. It is grounded in policies like
a chronically inadequate minimum wage and an increasingly unprogressive tax system, for which Mr. McCain
offers no alternatives.

As for Wall Street, Mr. McCain blamed the meltdown on “unbridled corruption and greed.” He called for
a commission to find out what happened and propose solutions. His diagnosis and his cure are misguided.
The crisis on Wall Street is fundamentally a failure to do the things that temper, detect and punish corruption
and greed. It was a failure to police the markets, to enforce rules, to heed and sound warnings and expose
questionable products and practices.

Huffington Post: A
Nation of Village Idiots. By James Moore. Excerpts: Let's just consider the money. The public bailout of insurance
giant (becoming a dwarf) AIG is estimated at $85 billion. According to one report, that's more than the Bush administration
spent on Aid to Families with Dependent Children during his entire time in office. That amount of money would
also pay for health care for every man, woman, and child in America for at least six months.

How did we get here?

That's pretty easy to answer, too. His name is Phil Gramm. A few days after the Supreme Court made George
W. Bush president in 2000, Gramm stuck something called the Commodity Futures Modernization Act into the
budget bill. Nobody knew that the Texas senator was slipping America a 262 page poison pill. The Gramm Guts
America Act was designed to keep regulators from controlling new financial tools described as credit "swaps." These
are instruments like sub-prime mortgages bundled up and sold as securities. Under the Gramm law, neither
the SEC nor the Commodities Futures Trading Commission (CFTC) were able to examine financial institutions
like hedge funds or investment banks to guarantee they had the assets necessary to cover losses they were
guaranteeing.

This isn't small beer we are talking about here. The market for these fancy financial instruments they
don't expect us little people to understand is estimated at $60 trillion annually, which amounts to almost
four times the entire US stock market.

And Senator Phil Gramm wanted it completely unregulated. So did Alan Greenspan, who supported the legislation
and is now running around to the talk shows jabbering about the horror of it all. Before the highly paid
lobbyists were done slinging their gold card guts about the halls of congress, every one from hedge funds
to banks were playing with fire for fun and profit.

Gramm didn't just make a fairy tale world for Wall Street, though. He included in his bill a provision
that prevented the regulation of energy trading markets, which led us to the Enron collapse. There was
no collapse of the house of Gramm, however, because his wife Wendy, who once headed up the Commodities
Futures Trading Commission, took a job on the Enron board that provided almost $2 million to their household
kitty. And why not? Wendy got a CFTC rule passed that kept the federal government from regulating energy
futures contracts at Enron.

New York Times Op-Ed: For
Wall Street, Greed Wasn’t Good Enough. Excerpts: As long as people are compensated hugely for taking risks
with other people’s money, and do not suffer equally on the downside, then those risks will inevitably become
outrageous. Whether markets are efficient or not I don’t know for sure, but I do know that if there’s a way
for someone to make money at another’s expense, he will. In spades. I want out. ...

I believe that to get to the root of the matter, we have to address the bad side of greed. We know from
Ivan Boesky and Gordon Gecko that greed can be good. Greed makes the world go around; it makes people take
risks that ultimately lead to economic or scientific advances. But the greedy must also face the consequences
of taking those risks.

Thus the current system of compensation at financial companies does not lead to anything good at all.
If you give $10 million to random people on the street and tell them that they’ll get 20 percent of any
profit they make, without any consequences if they lose it, then many of them will go into the nearest
casino and bet it all on red. (The really clever ones will find a way to leverage it up first — after all,
a $2 million bonus is nothing; you can’t seriously expect people to live in New York or London on less
than eight figures, can you?)

Many Lehman Brothers employees received some of their compensation in Lehman shares. They aren’t feeling
too happy right now. But a system run on that principle could achieve exactly what is needed: a closer
link between a person’s paycheck and the longer-term success of his trading. At the moment, a trader can
sell a 10-year toxic contract, pocket a nice bonus after a few months based on some theoretical valuation,
and then disappear to another bank or off into the sunset, leaving nine years in which that contract could
blow up.

These companies need to tie compensation to long- rather than short-term performance. This won’t be popular
on Wall Street, but if we want to turn investment banking back to performing something useful and positive
rather than some sort of riverboat-gambling scheme on which we are all unwitting participants, then there’s
not much choice.

New York Times Op-Ed: Need
a Job? $17,000 an Hour. No Success Required. By Nicholas D. Kristof. Excerpts: Are you capable of taking a
perfectly good 158-year-old company and turning it into dust? If so, then you may not be earning up to your
full potential. You should be raking it in like Richard Fuld, the longtime chief of Lehman Brothers. He took
home nearly half-a-billion dollars in total compensation between 1993 and 2007.

Last year, Mr. Fuld earned about $45 million, according to the calculations of Equilar, an executive pay
research company. That amounts to roughly $17,000 an hour to obliterate a firm. If you’re willing to drive
a company into the ground for less, apply by calling Lehman Brothers at (212) 526-7000.

New York Times Op-Ed: Crisis
Endgame. By Paul Krugman. Excerpt: On Sunday, Henry Paulson, the Treasury secretary, tried to draw a line
in the sand against further bailouts of failing financial institutions; four days later, faced with a crisis
spinning out of control, much of Washington appears to have decided that government isn’t the problem, it’s
the solution. The unthinkable — a government buyout of much of the private sector’s bad debt — has become the
inevitable.

BusinessWeek: Is
It the Dawn of the Reregulation Era? Regulation has been a dirty word in business—and in Washington—for
decades. But government oversight is looking a lot better lately. By Michael Mandel. Excerpts: The 30-year
era of deregulation came to a sudden and surprising end on Sept. 16. Late that evening the Federal Reserve
extended $85 billion to take an unprecedented 80% stake in American International Group in order to save
the floundering insurance giant. Less than two weeks earlier, Treasury Secretary Henry M. Paulson Jr. had
announced that the federal government was taking over Fannie Mae and Freddie Mac, the colossal mortgage agencies.
Suddenly the U.S. financial sector could not survive without government help.

Since the long-ago days when Jimmy Carter was President, regulation has been a dirty word in Washington.
Politicians of both parties vied to see how much of the economy they could free from the oppressive yoke
of government control. The deregulation movement started when Carter signed the Airline Deregulation Act
of 1978. Later, as it spread from energy to trucking to telecommunications to financial services, the rallying
cry was the same: Less regulation, more growth.

But the implosion in financial services—until recently seen as the shining example of U.S-style free market
capitalism—is the definitive sign that deregulation has lost its allure. In areas ranging from food safety
to airlines to trade, increased government supervision is becoming acceptable to business as well as to
voters. "Over the past couple of years, the mood has changed," says Chris Waldrop, director of
the Food Policy Institute at Consumer Federation of America. "What's possible has expanded."

Senator Bernie Sanders: An Economy in Crisis.
Excerpts: In my view, we need an emergency surtax on those at the very top in order to pay for any losses
the Federal Government suffers as a result of efforts to shore up the economy. It should not be hard-working
people who are trying to figure out how they are going to keep their families economically above water, people
who are working longer hours for lower wages, people who have lost their health care, people who cannot afford
to pay their fuel bills this winter. Those are not the people who should be asked to pay for this bailout.
If there is a bailout that has to be paid for, it should be the people, the segment of society that has benefited
from Bush's economic and tax policies over the last eight years. It is this very small segment of our population
that has made out like bandits--frankly, some of them are bandits--during the Bush administration. We have
to recognize that when we talk about who is going to pay for the bailouts.” ...

The Economy and Real People. “While Senator McCain and President Bush think the fundamentals of our economy
are strong, while they talk about how robust things are, the reality is that the middle class in this country
is collapsing, and if we don't make the kind of bold changes we need to make for the first time in the
modern history of America, our children will have a lower standard of living than we do. Since President
Bush has been in office, nearly 6 million Americans have slipped out of the middle class and into poverty.
Since Bush has been in office, over 7 million Americans lost their health insurance. Over 3 million manufacturing
jobs have been lost. Total consumer debt has more than doubled. Median income for working-aged Americans
has gone down more than $2,000 when adjusting for inflation. The typical American family is paying over
$1,700 more on their mortgages, $2,100 more for gasoline, $1,500 more for child care, $1,000 more for a
college education, $350 more on their health insurance, and $200 a year more for food than before President
Bush was in office.”

Comment 09/14/08: When I left the business a year ago, the goal was 80% of the IGS offshored. Do you
think the goal has changed? Oh and do you put yourself in the 20% who are left. Another question, if you
are a part of that 20%, what have you gained? More hours, more frustration, and no pay increases. You have
the opportunity to take control of your future - join the Alliance - it is exactly what management doesn't
want! -smiley-

Comment 09/14/08: Several big hush-hush mtgs with mgrs here in BTV ... rumor mill is 1000 employees being
let go by end of the month. This would devastate the BTV area. But I'm hearing it will also show where
and what IBM plans on doing with BTV. -BTV Blind-

Comment 09/15/08: Thanks to the Alliance for having my back. Already protecting me. That's great. I am
a retiree. I know the only way my pension will see an increase or my medical a decrease is through a union
contract. That is one reason I support a union. Another is that as an SSR I saw so much rampant favoritism;
that to do nothing, was intolerable to me. I would let my co workers see my Alliance union card as a way
to open the conversation to join the Alliance. Management appointing their friends to bully the rest of
the team and not even bothering to pretend to listen to anyone but their friends is nothing but arrogance
and is certainly not the leadership that made IBM great.

Workers need something to feel loyal to. IBM as a corporate entity has left that need in a vacuum. Nature
abhors a vacuum. Workers can fill that vacuum by joining with their coworkers in an alliance to make their
corporate and personal lives better.

The greed mongers in the investment world have driven the US economy to the brink of depression. This
is destroying peoples 401k's and their future retirements. Our kids will be lucky to eat when they get
to retirement. The only answer to corporate greed and Wall Street running over you is to unionize America.
I don't know about the rest of you, but I can not grow enough food on my property to feed myself year
to year and I bet most of you are in the same boat. A decent job with a decent pension at the end is
the best we can do. We need to save American Jobs and our own families future NOW. Once the jobs are
gone they will not come back.

For the folks sick of hearing this message from me, too bad. Do not come to a football game and expect
the home team's cheerleaders to root for the other team. By the way. I am a Republican who believes that
we need strong companies to promote job growth and strong unions for employee well being and the two
entities can work together to create a booming American economy once again. -Exodus2007-

Comment 09/15/08: I was RA'ed today after 23 years of service . I'm beside myself.. My life has been
turned upside down by this company. How many lives have be ruined? -Joe-

Alliance reply: We are sorry for your job loss. This has been happening for more than a decade. The number
of lives ruined is inversely proportional to the amount of IBMers it will take to decide that a union contract
is what they really need. Many others have waited until it is too late. To those IBMers still hanging on:
Organize now. We can help. Join Alliance@IBM / Alliance@IBM

Comment 09/16/08: Re Joe's post: What is the deal with 23 years? I've seen this number more than once,
and I also was RA'ed (in 2005) at 23+ years - under the rules at the time (I don't know if this is still
the case), I would have received additional severance benefits at 24 1/2 years (bridging to 25 years),
which made me suspicious (same old story, I had good ratings etc. - in fact I did some part time work for
IP Law - THEY called me! - after I left, finishing up some in-progress patents, more to improve my resume
than for the money really) - I wondered whether freezing the pension plan might cut down on this sort of
thing, but apparently not.

The relatively small-scale rolling RAs is a clever strategy, since it seems to make it impossible to obtain
U.S.-wide longer term RA'ed age numbers (which I'm sure would show blatant age discrimination, even more
convincingly than the Burlington case). Joe don't worry - part of the problem (at least this was true for
me) with working for IBM so long is that your job has become part of your identity. However the fact that
you lasted so long indicates that you must have excellent skills (whatever your job was), not to mention
experience, which should open up many new opportunities for you. Good luck! For others: it would be a good
idea to read the Alliance reply to Joe's post carefully. -jtr-

Comment 09/16/08: Economic crisis in US triggered by offshoring jobs. Like didn't the US govt see this
coming? What about the huge number of H1B visas where people come onshore, work and get paid in their home
countries? US breadwinner loses job to India, US breadwinner can't find another job, US breadwinner does
not pay mortgage. But companies like IBM, well their CEOs are still getting their multimillion dollar pay
and bonuses. I never thought IBM would influence the vote, but hey forget the values, whoever keeps jobs
in the US ...should be the next President. -Saw it coming

Comment 09/16/08: Best of luck to Joe and his family. You have joined the ever growing ranks of people
who can put the letters EX in front of IBMer. Remember you came to IBM looking for a job and you are just
leaving the same way. Get even by enjoying the rest of your life! -Exodus2007-

Comment 09/16/08: GTS Integrated Technology Services Resource Action (GIRA) package in process. I rec'd
notification 9/15 that I have 30 days to "find another oppty in IBM" or be "let go".
The package calls this a"permanent layoff". There are 8 pages of job/titles within ITS impacted
by this RA, majority are age 40+, like myself, in higher band roles so also likely within a few years of
retirement and 2's on"manage out" and "prior pension plan" like me. There is no waiver
per say, but the terms of signing the agreement indicate you will not sue IBM for age/race discrimination,
or for any other reason. -JustanIBMachine-

Comment 09/16/08: I'm an engineer that got a promotion and a good raise a few months ago. I'm 55 with
15 years service, so I qualify for full pension and FHA. If I believed what I read here I would have been
unemployed five years ago with a smaller pension. Why should I sign up with the Alliance? -Go Blue-

Comment 09/17/08: Hey -Go Blue- if you're an engineer then I suppose you have some analytical expertise
- no doubt you've noticed the changes, analyzed the situation, and determined that the most important skills
these days are your sucking-up skills, which you must have got pretty good at to still be around - can't
say much for your analytical expertise as far as a pension goes though - "full pension"?!?!?
- first the pension plan was frozen, second at 15 years you would have to have the (now frozen!) crappy
cash balance plan which is not a pension plan in any conventional sense of the word. -that was funny-

Comment 09/18/08: No wonder IBM employees can't unionize if they are all like Go Blue. Gotta hand it
to IBM recruiting. They hire the best gullible folks they can. -anonymous-

Comment 09/18/08: Go Blue: You don't get anything close to full IBM vested pension. You probably got
the cash balance plan. You lost big time with it. Also, IBM froze all pension plans last year so you have
no chance to get your full cash balance pension now. Do you have it IN WRITING from IBM that they GUARANTEE
that you'll get the Future Hell Account (FHA)? Without a union contract IBM can take this away at any time.
Look at all the takeaways or reductions in benefits from IBM. The chances of you not getting the full FHA
in your lifetime is better than an even bet. Also, by the way, the FHA is a notional account. No real money
in it to purchase health benefits from IBM. It's not protected like your pension by any law (pensions are
protected by ERISA). The FHA funds are basically the equivalent of poker chips. And you're all in? The
bluff is very well on you then. Gerstner got his medical benefits in writing from IBM for his retirement.
Then why are you so happy without a contract for your retirement benefits? -sby_willie-

Comment 09/18/08: -Go Blue- You think you got a FULL pension? You are in the cash pittance plan, right?
Do the math. You lost big in your pension. It's naive folks like you that IBM craves. Try some more of
the koolaid. The next flavor coming from Armonk is supposedly "new and improved" and sure to
quench your thirst! great. -jim_Jones-

Comment 9/19/08: I left IBM on my terms months ago. Could not afford to look around unsatisfied people
complaining and doing nothing about job conditions. Not even writing a resume. IBM has become a greed company.
HR policy is now only about top 10% (top talent, technical and exec resources) and becoming one of them
mean serving your manager as a slave. It was a great satisfaction to leave 1st and 2nd line manager with
a (new) salary greater than theirs. And I left behind people fighting each other to get "visibility".
Today's life at IBM is just that. Manager do lot of meetings to identify poor performers (i.e. people who
not behave like them expect). Good luck IBMers. You may even be in the top talent list (now), but you are
getting older and your turn will come. -a_saved_one-

Comment 9/19/08: To>>-Go Blue- >> If you did not retire prior to YE2007, you kissed the 10%
of Full Pension away. You will get your FHA, and whatever your Vested Rights payments were from the past
2'nd choicer plan. You seem to be very naive of the plan changes and the Pension FREEZE. Either that or
you are "full of Palmisano". -no_ky-

Comment 09/15/08: And he has the nerve to cut other peoples pay! IBM CEO Sam Palmisano took home $18.8
million in 2006 and will receive $34.9 million in deferred pay and $33.1 million in retirement benefits
when he leaves IBM. -BloodyWellWrong-

Comment 9/18/08: I'm 48 years old with 26 years in IBM. I finally looked at my pension if I quit working
tomorrow. It's about $500 a month. How can this be? If I was unemployed I would get $405 in NY state for
a WEEK. So I am joining the Alliance. What do I have to lose? If IBM RA's me, I get more in unemployment
benefits than I would for 26 years of hard and honest work for this cheap as s**t company! Without a union
I am probably better off being RA'ed with a severance package. -pension_what_pension?-

Comment 09/13//08: YES! That's the way ibm works. Don't expect anything special in the way of raises.
In fact, it would be best to not expect a raise at all. IBM does everything in their power to ensure employees
do not get any raises. They will come up with all sorts of excuses, from "we didn't' hit our numbers", "you
are being paid more than the average" or"there is no extra money in the budget". For 2009,
I have heard they will be telling folks: "The bar has been raised, if you were a 2+ worker last year,
expect to be a 2 this year". Every few years their strategy changes, but the net results are the same...you
will not get any raise, or if you do, it will be 1%. If you want to grow your salary, you're at the wrong
company. Don't stay here if you are thinking you'll get any sort of better treatment in the future. This
company has operated the same for the past 2 decades now. The only folks who see any sizeable raise are
the executives, and they fatten their salaries by cutting back on salaries for the little guys. -miss understanding-

Comment 09/18//08: Salary = 67000; Band Level = 6; Job Title = Software Engineer; Years Service = 2;
Hours/Week = 45; Location = EFK; Message = I've pretty much had it with IBM... so I tried to "test
the waters" in
my area to see what jobs might be out there. If anything, I was shocked at how much lower IBM was paying
me than the average of the 3 different job offers I got. All three were in the neighborhood of a 40% raise!
Every year, I run into different excuses for no raise, no funding for training, no resources to help on
projects. I mean, how are we supposed to perform if we aren't given the support that we need to do the
job?

I actually like my current manager, but I think he's really powerless with the entire structure he is
trying to function in. I feel sorry for my manager, he's actually the best one I've had so far. Last year,
I was 2% above median... this year I am 25% above median. How is that even possible to be more overpaid
after 1 full year of inflation? I have no idea where they get their statistics.

A simple search on Salary.com definitely doesn't come up with the numbers they are putting in front
of me. So I finally accepted a job offer and I'm about to tell my manager in the next few days about
leaving. Although I have made long lasting personal friendships in my job at IBM, I know it's time for
me to move on as I don't see myself growing my career while sustaining any future financial needs. Also,
the new job has MUCH BETTER health care benefits, something which I was surprised given that it's a much
smaller company. -Almost_Gone-

Comment 9/18/08: Regardless how I meet my PBC objectives 100% I was told I would get a 3 this year, no
matter how hard I work, no matter how long hours I put in, it is because of the stupid relative contribution
policy and the team-based decision meeting between 2nd line manager and her 1st line managers. Now I've
got to look for another job around, and I am not sure how I could get an offer with a "3" I was
assured that several people were able to find other jobs around even though they got a 3 in their last
PBC. How would you deal this if you were I? -Geez-

Comment 9/18/08: Geez: Without union representation and without the ability to file a real grievance
you have to go through the IBM Appeals, Open Door, or Confidentially Speaking processes/programs. Make
sure you have everything documented regarding your contributions and performance before you do. Good Luck
to you if you do. IBM HR is a tough bitter cookie these days on it's resources. -sby_willie-

Vault Message Board Posts

If you hire good people and treat them well, they will try to do a good job.
They will stimulate one another by their vigor and example.
They will set a fast pace for themselves.
Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will
share in its sucess, they will contribute in a major way.
The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders.
—Thomas J. Watson, Jr., from A
Business and Its Beliefs: The Ideas That Helped Build IBM.

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